Normalized FFO Per Share for the First Quarter Increases by 4.7% Year
over Year to $0.45
NEWTON, Mass.--(BUSINESS WIRE)--
Senior Housing Properties Trust (NYSE: SNH) today announced its
financial results for the quarter ended March 31, 2015.
SNH's President and Chief Operating Officer, David Hegarty, made the
following statement:
"Our financial performance improved during the first quarter of 2015,
highlighted by Normalized FFO growth of 4.7% compared to the comparable
period last year. We also grew consolidated same property cash NOI by
1.1% year over year, including 5.0% same property NOI growth year over
year in our managed senior living portfolio. SNH is achieving these
improvements in its financial performance while we continue to upgrade
the quality of our portfolio of properties. During the first quarter, we
completed the acquisition of 23 high quality MOBs leased to strong
credit quality tenants for approximately $539 million. Since the end of
the first quarter, we have also closed the acquisition of 37 private pay
senior living communities for approximately $763 million, 18 of which
are leased and 19 of which are operated in a taxable REIT subsidiary
structure."
Results for the quarter ended March 31, 2015:
Normalized funds from operations, or Normalized FFO, for the quarter
ended March 31, 2015 were $98.6 million, or $0.45 per basic and diluted
share. This compares to Normalized FFO for the quarter ended March 31,
2014 of $80.1 million, or $0.43 per basic and diluted share. The
increase in Normalized FFO is primarily the result of acquisitions since
April 1, 2014.
Net income was $39.8 million, or $0.18 per basic and diluted share, for
the quarter ended March 31, 2015, compared to net income of $38.6
million, or $0.21 per basic and diluted share, for the quarter ended
March 31, 2014.
The basic and diluted weighted average number of common shares
outstanding were 221.4 million for the quarter ended March 31, 2015, and
188.0 million for the quarter ended March 31, 2014.
Reconciliations of net income determined in accordance with U.S.
generally accepted accounting principles, or GAAP, to funds from
operations, or FFO, and Normalized FFO for the quarters ended March 31,
2015 and 2014 appear later in this press release.
Operating Results for the quarter ended March 31, 2015:
For the three months ended March 31, 2015, consolidated same property
net operating income, or NOI, and cash basis NOI increased 0.9% and
1.1%, respectively, compared to the quarter ended March 31, 2014.
For the three months ended March 31, 2015, 43.9% of SNH's NOI came from
121 properties leased to medical providers, medical related businesses,
clinics and biotech laboratory tenants, or MOBs, including 11.3 million
square feet of leasable area. As of March 31, 2015, 96.2% of SNH's MOB
square feet were leased, compared to 95.9% as of December 31, 2014 and
95.0% as of March 31, 2014. Same property occupancy for SNH's MOBs owned
continuously since January 1, 2014 decreased to 94.6% as of March 31,
2015, compared to 95.0% as of March 31, 2014. Same property NOI and cash
basis NOI decreased 2.3% and 1.5%, respectively, during the quarter
ended March 31, 2015 compared to the quarter ended March 31, 2014.
For the three months ended March 31, 2015, 38.6% of SNH's consolidated
NOI came from 214 triple net leased senior living communities with
24,016 living units. Occupancy at triple net leased senior living
communities was 85.3% during the most recently reported period, compared
to 84.8% during the comparable period last year.(1) Same
property occupancy at triple net leased senior living communities owned
continuously since January 1, 2014 was 85.6% during the most recently
reported period, compared to 85.4% during the comparable period last
year.(1) Same property NOI and cash basis NOI increased 1.4%
and 1.2%, respectively, during the quarter ended March 31, 2015 compared
to the quarter ended March 31, 2014.
For the three months ended March 31, 2015, 14.3% of SNH's NOI came from
46 managed senior living communities with 7,290 living units. Occupancy
at managed senior living communities was 88.0% during the quarter ended
March 31, 2015, compared to 88.8% during the comparable period last
year. Same property occupancy for managed senior living communities
owned continuously since January 1, 2014 decreased to 87.9% during the
quarter ended March 31, 2015, from 88.8% during the comparable period
last year. Same property NOI and cash basis NOI both increased 5.0%
during the quarter ended March 31, 2015 compared to the quarter ended
March 31, 2014.
Reconciliations of NOI and cash basis NOI to net income determined in
accordance with GAAP for the quarters ended March 31, 2015 and 2014
appear later in this press release.
(1) Most recent reported data is based upon the operating
results provided by SNH's tenants for the 12 months ended December 31,
2014 and 2013 or the most recent prior period for which tenant operating
results are available.
Recent Investment and Sales Activities:
In January 2015, SNH acquired 23 MOBs, for approximately $539.0 million,
including the assumption of approximately $30.0 million of mortgage debt
with a weighted average interest rate of 4.7%. The MOBs contain
approximately 2.2 million square feet and are located in 12 states.
In December 2014, SNH entered into a purchase agreement to acquire 38
senior living communities with 3,466 living units located in 16 states
for $790.0 million, excluding closing costs, and including the
assumption of approximately $153.0 million of mortgage debt with a
weighted average interest rate of 4.8%. On May 1, 2015, SNH completed
the acquisition of 37 of these senior living communities with 3,379
living units for $762.6 million, and SNH amended the purchase agreement
to accommodate a delayed closing of the remaining one senior living
community with 87 living units, which SNH expects to acquire before year
end 2015. Nineteen of the 38 communities, with 2,190 living units,
including the one community that SNH has not yet acquired, are leased to
seven senior living operators. The 19 remaining communities, with 1,276
living units, were acquired using Taxable REIT Subsidiary, or TRS,
structures. SNH terminated the pre-existing management agreements for 14
of these communities, with 881 living units, and entered into management
agreements with Five Star Quality Care, Inc., or Five Star, to manage
these communities. The remaining five communities, with 395 living
units, will continue to be managed by the current third party senior
living operator. SNH financed this acquisition using cash on hand,
borrowings under its revolving credit facility and the assumption of
approximately $139.2 million of mortgage debt with a weighted average
interest rate of 4.59%.
In April 2015, SNH entered into an agreement to acquire one new senior
living community with 40 private pay independent living units located in
Cumming, GA, for approximately $9.8 million, excluding closing costs.
SNH intends to acquire this community using a TRS structure and expects
to enter into a management agreement with Five Star to manage this
community. This community is adjacent to an assisted living community
owned by SNH which is managed by Five Star. This acquisition is expected
to close in 2015.
In February 2015, SNH sold one vacant senior living community with 120
units located in Pennsylvania for $250,000, excluding closing costs. In
April 2015, SNH sold one MOB (four buildings) with an aggregate 323,541
square feet located in New Mexico for $1.5 million, excluding closing
costs.
Recent Financing Activities:
In February 2015, SNH issued 31,050,000 common shares in a public
offering, raising gross proceeds of approximately $689.3 million, before
underwriting discounts and expenses. SNH used part of the net proceeds
of this offering to repay borrowings outstanding under its unsecured
revolving credit facility and used the remainder for general business
purposes, including the partial funding of the acquisition of 38 senior
living communities reported above. Also in February 2015 and after this
equity offering, SNH terminated a $700.0 million bridge loan commitment
it had received in December 2014 and recognized a loss of $1.4 million
on extinguishment of debt in the first quarter of 2015 in connection
with that termination.
In February 2015, SNH repaid at par a mortgage note encumbering one
property with a principal balance of $29.2 million and an interest rate
of 6.02%. In April 2015, SNH prepaid a mortgage note encumbering one
property with a principal balance of $6.3 million and an interest rate
of 5.81%.
Conference Call:
On Wednesday, May 6, 2015, at 1:00 p.m. Eastern Time, David J. Hegarty,
President and Chief Operating Officer, and Richard A. Doyle, Chief
Financial Officer, will host a conference call to discuss the financial
results for the quarter ended March 31, 2015. The conference call
telephone number is (800) 230-1074. Participants calling from outside
the United States and Canada should dial (612) 234-9959. No pass code is
necessary to access the call from either number. Participants should
dial in about 15 minutes prior to the scheduled start of the call. A
replay of the conference call will be available through 11:59 p.m.
Eastern Time on Wednesday, May 13, 2015. To hear the replay, dial (320)
365-3844. The replay pass code is 358456.
A live audio webcast of the conference call will also be available in a
listen-only mode on the company's website, which is located at www.snhreit.com.
Participants wanting to access the webcast should visit the company's
website about five minutes before the call. The archived webcast will be
available for replay on the company's website for about one week after
the call.
The transcription, recording and retransmission in any way of SNH's
first quarter 2015 conference call are strictly prohibited without the
prior written consent of SNH.
Supplemental Data:
A copy of SNH's First Quarter 2015 Supplemental Operating and Financial
Data is available for download from the SNH website, www.snhreit.com.
SNH's website is not incorporated as part of this press release.
SNH is a real estate investment trust, or REIT, that owned 392
properties (419 buildings) located in 39 states and Washington, D.C. as
of March 31, 2015. SNH is headquartered in Newton, MA.
Please see the pages attached hereto for a more detailed statement of
SNH's operating results and financial condition.
WARNING CONCERNING FORWARD LOOKING STATEMENTS
THIS PRESS RELEASE CONTAINS STATEMENTS THAT CONSTITUTE FORWARD LOOKING
STATEMENTS WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION
REFORM ACT OF 1995 AND OTHER SECURITIES LAWS. ALSO, WHENEVER SNH USES
WORDS SUCH AS "BELIEVE", "EXPECT", "ANTICIPATE", "INTEND", "PLAN",
"ESTIMATE" OR SIMILAR EXPRESSIONS, SNH IS MAKING FORWARD LOOKING
STATEMENTS. THESE FORWARD LOOKING STATEMENTS ARE BASED UPON SNH'S
PRESENT INTENT, BELIEFS OR EXPECTATIONS, BUT FORWARD LOOKING STATEMENTS
ARE NOT GUARANTEED TO OCCUR AND MAY NOT OCCUR. ACTUAL RESULTS MAY DIFFER
MATERIALLY FROM THOSE CONTAINED IN OR IMPLIED BY SNH's FORWARD LOOKING
STATEMENTS AS A RESULT OF VARIOUS FACTORS. FOR EXAMPLE:
-
THIS PRESS RELEASE STATES THAT SNH HAS AGREED TO ACQUIRE ONE SENIOR
LIVING COMMUNITY FOR APPROXIMATELY $9.8 MILLION AND THAT THE CLOSING
IS EXPECTED TO OCCUR IN 2015. THIS TRANSACTION IS SUBJECT TO CLOSING
CONDITIONS. THESE CONDITIONS MAY NOT BE SATISFIED AND THE ACQUISITION
MAY NOT OCCUR, MAY BE DELAYED OR THE PRICE AND TERMS MAY CHANGE.
-
THIS PRESS RELEASE REFERS TO 38 SENIOR LIVING COMMUNITIES, 37 OF WHICH
WERE RECENTLY ACQUIRED BY SNH IN MAY 2015, AS PRIVATE PAY. ALTHOUGH
ALL THE RESIDENTS AT THESE COMMUNITIES CURRENTLY PAY FOR SERVICES AT
THOSE COMMUNITIES PRIMARILY WITH PRIVATE RESOURCES, RESIDENT RESOURCES
MAY BE EXHAUSTED OR GOVERNMENT PROGRAMS MAY BE CHANGED SO THAT FUTURE
PAYMENTS MAY BE RECEIVED FROM GOVERNMENT PROGRAMS.
-
THIS PRESS RELEASE STATES THAT SNH HAS YET TO COMPLETE THE ACQUISITION
OF ONE OF 38 SENIOR LIVING COMMUNITIES AND THAT SNH EXPECTS THE
CLOSING TO OCCUR BEFORE YEAR END 2015. THE ACQUISITION OF THIS
REMAINING SENIOR LIVING COMMUNITY IS SUBJECT TO CLOSING CONDITIONS.
THESE CONDITIONS MAY NOT BE SATISFIED AND THE ACQUISITION MAY BE
DELAYED FURTHER OR THE TERMS MAY CHANGE.
THE INFORMATION CONTAINED IN SNH'S FILINGS WITH THE SECURITIES AND
EXCHANGE COMMISSION, OR SEC, INCLUDING UNDER THE CAPTION "RISK FACTORS"
IN ITS PERIODIC REPORTS, OR INCORPORATED THEREIN, IDENTIFIES OTHER
IMPORTANT FACTORS THAT COULD CAUSE DIFFERENCES FROM SNH'S FORWARD
LOOKING STATEMENTS. SNH'S FILINGS WITH THE SEC ARE AVAILABLE ON THE
SEC'S WEBSITE AT WWW.SEC.GOV.
YOU SHOULD NOT PLACE UNDUE RELIANCE UPON FORWARD LOOKING STATEMENTS.
EXCEPT AS REQUIRED BY LAW, SNH DOES NOT INTEND TO UPDATE OR CHANGE ANY
FORWARD LOOKING STATEMENTS AS A RESULT OF NEW INFORMATION, FUTURE EVENTS
OR OTHERWISE.
|
|
|
|
|
SENIOR HOUSING PROPERTIES TRUST
CONSOLIDATED STATEMENTS OF INCOME
(amounts in thousands, except per share data)
(unaudited)
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
March 31,
|
|
|
|
|
2015
|
|
|
|
2014
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
Rental income
|
|
|
|
$
|
145,784
|
|
|
|
$
|
112,055
|
Residents fees and services
|
|
|
|
|
82,793
|
|
|
|
|
79,442
|
Total revenues
|
|
|
|
|
228,577
|
|
|
|
|
191,497
|
|
|
|
|
|
|
|
|
|
|
|
Expenses:
|
|
|
|
|
|
|
|
|
|
|
Property operating expenses
|
|
|
|
|
85,794
|
|
|
|
|
77,802
|
Depreciation
|
|
|
|
|
53,707
|
|
|
|
|
38,355
|
General and administrative
|
|
|
|
|
10,574
|
|
|
|
|
8,290
|
Acquisition related costs
|
|
|
|
|
1,158
|
|
|
|
|
122
|
Total expenses
|
|
|
|
|
151,233
|
|
|
|
|
124,569
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
|
|
77,344
|
|
|
|
|
66,928
|
|
|
|
|
|
|
|
|
|
|
|
Interest and other income
|
|
|
|
|
75
|
|
|
|
|
105
|
Interest expense
|
|
|
|
|
(35,942)
|
|
|
|
|
(28,900)
|
Loss on extinguishment of debt
|
|
|
|
|
(1,409)
|
|
|
|
|
—
|
Income from continuing operations before income tax expense and
equity in earnings of an investee
|
|
|
|
|
40,068
|
|
|
|
|
38,133
|
Income tax expense
|
|
|
|
|
(110)
|
|
|
|
|
(191)
|
Equity in earnings (losses) of an investee
|
|
|
|
|
72
|
|
|
|
|
(97)
|
Income from continuing operations
|
|
|
|
|
40,030
|
|
|
|
|
37,845
|
Discontinued operations:
|
|
|
|
|
|
|
|
|
|
|
(Loss) income from discontinued operations
|
|
|
|
|
(241)
|
|
|
|
|
1,300
|
Impairment of assets from discontinued operations
|
|
|
|
|
—
|
|
|
|
|
(721)
|
Income before gain on sale of properties
|
|
|
|
|
39,789
|
|
|
|
|
38,424
|
Gain on sale of properties
|
|
|
|
|
—
|
|
|
|
|
156
|
Net income
|
|
|
|
$
|
39,789
|
|
|
|
$
|
38,580
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding (basic)
|
|
|
|
|
221,375
|
|
|
|
|
188,026
|
Weighted average common shares outstanding (diluted)
|
|
|
|
|
221,397
|
|
|
|
|
188,045
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted per common share amounts:
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations
|
|
|
|
$
|
0.18
|
|
|
|
$
|
0.21
|
Loss (income) from discontinued operations
|
|
|
|
|
—
|
|
|
|
|
—
|
Net income
|
|
|
|
$
|
0.18
|
|
|
|
$
|
0.21
|
|
|
|
|
SENIOR HOUSING PROPERTIES TRUST
CONSOLIDATED STATEMENTS OF FUNDS FROM OPERATIONS AND NORMALIZED
FUNDS FROM OPERATIONS
(amounts in thousands, except per share data)
(unaudited)
|
|
|
|
|
Calculation of Funds from Operations (FFO) and Normalized FFO
(1):
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
March 31,
|
|
|
|
2015
|
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
$
|
39,789
|
|
|
$
|
38,580
|
|
Depreciation expense from continuing operations
|
|
|
|
53,707
|
|
|
|
38,355
|
|
Gain on sale of properties
|
|
|
|
—
|
|
|
|
(156
|
)
|
Impairment of assets from discontinued operations
|
|
|
|
—
|
|
|
|
721
|
|
FFO
|
|
|
|
93,496
|
|
|
|
77,500
|
|
Acquisition related costs from continuing operations
|
|
|
|
1,158
|
|
|
|
122
|
|
Loss on extinguishment of debt
|
|
|
|
1,409
|
|
|
|
—
|
|
Percentage rent adjustment(2)
|
|
|
|
2,500
|
|
|
|
2,500
|
|
Normalized FFO
|
|
|
$
|
98,563
|
|
|
$
|
80,122
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding (basic)
|
|
|
|
221,375
|
|
|
|
188,026
|
|
Weighted average shares outstanding (diluted)
|
|
|
|
221,397
|
|
|
|
188,045
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted per common share amounts:
|
|
|
|
|
|
|
|
|
FFO
|
|
|
$
|
0.42
|
|
|
$
|
0.41
|
|
Normalized FFO
|
|
|
$
|
0.45
|
|
|
$
|
0.43
|
|
Net income
|
|
|
$
|
0.18
|
|
|
$
|
0.21
|
|
Distributions declared per share
|
|
|
$
|
0.39
|
|
|
$
|
0.39
|
|
|
|
|
|
|
|
|
|
|
|
(1) SNH calculates FFO and Normalized FFO as shown above. FFO is
calculated on the basis defined by the National Association of Real
Estate Investment Trusts, or NAREIT, which is net income, calculated in
accordance with GAAP, excluding any gain or loss on sale of properties
and impairment of real estate assets, plus real estate depreciation and
amortization, as well as certain other adjustments currently not
applicable to SNH. SNH's calculation of Normalized FFO differs from
NAREIT's definition of FFO because SNH's includes estimated percentage
rent in the period to which SNH estimates that it relates rather than
when it is recognized as income in accordance with GAAP, includes
estimated business management incentive fees, if any, only in the fourth
quarter versus the quarter they are recognized as expense in accordance
with GAAP and excludes acquisition related costs, gain or loss on early
extinguishment of debt, gain or loss on lease terminations and loss on
impairment of intangible assets, if any. SNH considers FFO and
Normalized FFO to be appropriate measures of operating performance for a
real estate investment trust, or REIT, along with net income, operating
income and cash flow from operating activities. SNH believes that FFO
and Normalized FFO provide useful information to investors because by
excluding the effects of certain historical amounts, such as
depreciation expense, FFO and Normalized FFO may facilitate a comparison
of its operating performance between periods and with other REITs. FFO
and Normalized FFO are among the factors considered by SNH's Board of
Trustees when determining the amount of distributions to shareholders.
Other factors include, but are not limited to, requirements to maintain
SNH's status as a REIT, limitations in its revolving credit facility
agreement, term loan agreement and public debt covenants, the
availability of debt and equity capital, SNH's expectation of its future
capital requirements and operating performance and SNH's expected needs
and availability of cash to pay its obligations. FFO and Normalized FFO
do not represent cash generated by operating activities in accordance
with GAAP and should not be considered as alternatives to net income,
operating income or cash flow from operating activities, determined in
accordance with GAAP, or as indicators of SNH's financial performance or
liquidity, nor are these measures necessarily indicative of sufficient
cash flow to fund all of SNH's needs. These measures should be
considered in conjunction with net income, operating income and cash
flow from operating activities as presented in SNH's Condensed
Consolidated Statements of Income and Comprehensive Income and Condensed
Consolidated Statements of Cash Flows. Other REITs and real estate
companies may calculate FFO and Normalized FFO differently than SNH does.
(2) In calculating net income in accordance with GAAP, SNH recognizes
percentage rental income received for the first, second and third
quarters in the fourth quarter, which is when all contingencies are met
and the income is earned. Although SNH defers recognition of this
revenue until the fourth quarter for purposes of calculating net income,
it includes these estimated amounts in its calculation of Normalized FFO
for each quarter of the year. The fourth quarter Normalized FFO
calculation excludes the amounts included during the first three
quarters.
|
|
|
|
SENIOR HOUSING PROPERTIES TRUST
CALCULATION AND RECONCILIATION OF NET OPERATING INCOME (NOI)
AND CASH BASIS NOI
(amounts in thousands)
(unaudited)
|
|
|
|
|
|
|
|
For the Three Months Ended
|
|
|
|
March 31,
|
|
|
|
2015
|
|
|
2014
|
Calculation of NOI and Cash Basis NOI (1):
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
Rental income
|
|
|
$145,784
|
|
|
$112,055
|
Residents fees and services
|
|
|
82,793
|
|
|
79,442
|
Total revenues
|
|
|
228,577
|
|
|
191,497
|
Property operating expenses
|
|
|
85,794
|
|
|
77,802
|
Property net operating income (NOI):
|
|
|
142,783
|
|
|
113,695
|
Non cash straight line rent adjustments
|
|
|
(3,509)
|
|
|
(1,578)
|
Lease value amortization
|
|
|
(1,198)
|
|
|
722
|
Lease termination fees
|
|
|
(105)
|
|
|
-
|
Cash Basis NOI
|
|
|
$137,971
|
|
|
$112,839
|
|
|
|
|
|
|
|
Reconciliation of Cash Basis NOI to Net
Income:
|
|
|
|
|
|
|
Cash Basis NOI
|
|
|
$137,971
|
|
|
$112,839
|
Non cash straight line rent adjustments
|
|
|
3,509
|
|
|
1,578
|
Lease value amortization
|
|
|
1,198
|
|
|
(722)
|
Lease termination fees
|
|
|
105
|
|
|
-
|
Property NOI
|
|
|
142,783
|
|
|
113,695
|
Depreciation expense
|
|
|
(53,707)
|
|
|
(38,355)
|
General and administrative expense
|
|
|
(10,574)
|
|
|
(8,290)
|
Acquisition related costs
|
|
|
(1,158)
|
|
|
(122)
|
Operating income
|
|
|
77,344
|
|
|
66,928
|
|
|
|
|
|
|
|
Interest and other income
|
|
|
75
|
|
|
105
|
Interest expense
|
|
|
(35,942)
|
|
|
(28,900)
|
Loss on early extinguishment of debt
|
|
|
(1,409)
|
|
|
-
|
Income before income tax expense and
|
|
|
|
|
|
|
equity in earnings (losses) of an investee
|
|
|
40,068
|
|
|
38,133
|
Income tax expense
|
|
|
(110)
|
|
|
(191)
|
Equity in earnings (losses) of an investee
|
|
|
72
|
|
|
(97)
|
Income from continuing operations
|
|
|
40,030
|
|
|
37,845
|
Discontinued operations
|
|
|
|
|
|
|
(Loss) income from discontinued operations
|
|
|
(241)
|
|
|
1,300
|
Impairment of assets from discontinued operations
|
|
|
-
|
|
|
(721)
|
Income before gain on sale of properties
|
|
|
39,789
|
|
|
38,424
|
Gain on sale of properties
|
|
|
-
|
|
|
156
|
Net income
|
|
|
$39,789
|
|
|
$38,580
|
|
|
|
|
|
|
|
(1) The calculation of NOI and Cash Basis NOI excludes certain
components of net income in order to provide results that are more
closely related to SNH's properties' results of operations. SNH
calculates NOI and Cash Basis NOI as shown above excluding properties
classified as discontinued operations. SNH defines NOI as income from
its real estate less its property operating expenses. NOI excludes
amortization of capitalized tenant improvement costs and leasing
commissions. SNH defines Cash Basis NOI as NOI less non cash straight
line rent adjustments, lease value amortization and lease termination
fees, if any. SNH considers NOI and Cash Basis NOI to be appropriate
supplemental measures to net income because they may help both investors
and management to understand the operations of SNH's properties. SNH
uses NOI and Cash Basis NOI internally to evaluate individual and
company-wide property level performance, and it believes that NOI and
Cash Basis NOI provide useful information to investors regarding its
results of operations because these measures reflect only those income
and expense items that are incurred at the property level and may
facilitate comparisons of its operating performance between periods and
with other REITs. NOI and Cash Basis NOI do not represent cash generated
by operating activities in accordance with GAAP and should not be
considered as an alternative to net income, operating income or cash
flow from operating activities determined in accordance with GAAP, or as
indicators of SNH's financial performance or liquidity, nor are these
measures necessarily indicative of sufficient cash flow to fund all of
SNH's needs. These measures should be considered in conjunction with net
income, operating income and cash flow from operating activities as
presented in SNH's Condensed Consolidated Statements of Income and
Comprehensive Income and Condensed Consolidated Statements of Cash
Flows. Other REITs and real estate companies may calculate NOI and Cash
Basis NOI differently than SNH does.
|
SENIOR HOUSING PROPERTIES TRUST Calculation and
Reconciliation of NOI, Cash Basis NOI, Same Property Net Operating
Income (NOI) and Same Property Cash Basis NOI by Segment (1)
(2) (amounts in thousands) (unaudited)
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended March 31, 2015
|
|
|
|
|
For the Three Months Ended March 31, 2014
|
Calculation of NOI and Cash Basis NOI:
|
|
|
|
Triple Net Leased Senior Living
Communities (2)
|
|
|
Managed Senior Living Communities (3)
|
|
|
MOBs (4)
|
|
|
Non-Segment (5)
|
|
|
Total
|
|
|
|
|
Triple Net Leased Senior Living
Communities (2)
|
|
|
Managed Senior Living Communities (3)
|
|
|
MOBs (4)
|
|
|
Non-Segment (5)
|
|
|
Total
|
Rental income / residents fees and services
|
|
|
|
$
|
55,251
|
|
|
|
|
$
|
82,793
|
|
|
|
|
$
|
86,001
|
|
|
|
$
|
4,532
|
|
|
|
$
|
228,577
|
|
|
|
|
|
$
|
54,890
|
|
|
|
|
$
|
79,442
|
|
|
|
|
$
|
52,763
|
|
|
|
$
|
4,402
|
|
|
$
|
191,497
|
|
Property operating expenses
|
|
|
|
|
-
|
|
|
|
|
|
(62,403
|
)
|
|
|
|
|
(23,391
|
)
|
|
|
|
-
|
|
|
|
|
(85,794
|
)
|
|
|
|
|
|
-
|
|
|
|
|
|
(60,788
|
)
|
|
|
|
|
(17,014
|
)
|
|
|
|
-
|
|
|
|
(77,802
|
)
|
Property net operating income (NOI)
|
|
|
|
$
|
55,251
|
|
|
|
|
$
|
20,390
|
|
|
|
|
$
|
62,610
|
|
|
|
$
|
4,532
|
|
|
|
$
|
142,783
|
|
|
|
|
|
$
|
54,890
|
|
|
|
|
$
|
18,654
|
|
|
|
|
$
|
35,749
|
|
|
|
$
|
4,402
|
|
|
$
|
113,695
|
|
NOI Growth
|
|
|
|
|
0.7
|
%
|
|
|
|
|
9.3
|
%
|
|
|
|
|
75.1
|
%
|
|
|
|
3.0
|
%
|
|
|
|
25.6
|
%
|
|
|
|
|
|
--
|
|
|
|
|
|
--
|
|
|
|
|
|
--
|
|
|
|
|
--
|
|
|
|
--
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property NOI
|
|
|
|
$
|
55,251
|
|
|
|
|
$
|
20,390
|
|
|
|
|
$
|
62,610
|
|
|
|
$
|
4,532
|
|
|
|
$
|
142,783
|
|
|
|
|
|
$
|
54,890
|
|
|
|
|
$
|
18,654
|
|
|
|
|
$
|
35,749
|
|
|
|
$
|
4,402
|
|
|
$
|
113,695
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non cash straight line rent adjustments
|
|
|
|
|
52
|
|
|
|
|
|
-
|
|
|
|
|
|
3,320
|
|
|
|
|
137
|
|
|
|
|
3,509
|
|
|
|
|
|
|
(39
|
)
|
|
|
|
|
-
|
|
|
|
|
|
1,480
|
|
|
|
|
137
|
|
|
|
1,578
|
|
Lease value amortization
|
|
|
|
|
-
|
|
|
|
|
|
-
|
|
|
|
|
|
1,143
|
|
|
|
|
55
|
|
|
|
|
1,198
|
|
|
|
|
|
|
-
|
|
|
|
|
|
-
|
|
|
|
|
|
(777
|
)
|
|
|
|
55
|
|
|
|
(722
|
)
|
Lease termination fees
|
|
|
|
|
-
|
|
|
|
|
|
-
|
|
|
|
|
|
105
|
|
|
|
|
-
|
|
|
|
|
105
|
|
|
|
|
|
|
-
|
|
|
|
|
|
-
|
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
-
|
|
Cash Basis NOI
|
|
|
|
$
|
55,199
|
|
|
|
|
$
|
20,390
|
|
|
|
|
$
|
58,042
|
|
|
|
$
|
4,340
|
|
|
|
$
|
137,971
|
|
|
|
|
|
$
|
54,929
|
|
|
|
|
$
|
18,654
|
|
|
|
|
$
|
35,046
|
|
|
|
$
|
4,210
|
|
|
$
|
112,839
|
|
Cash Basis NOI Growth
|
|
|
|
|
0.5
|
%
|
|
|
|
|
9.3
|
%
|
|
|
|
|
65.6
|
%
|
|
|
|
3.1
|
%
|
|
|
|
22.3
|
%
|
|
|
|
|
|
--
|
|
|
|
|
|
--
|
|
|
|
|
|
--
|
|
|
|
|
--
|
|
|
|
--
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of NOI to Same Property NOI:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property NOI
|
|
|
|
$
|
55,251
|
|
|
|
|
$
|
20,390
|
|
|
|
|
$
|
62,610
|
|
|
|
$
|
4,532
|
|
|
|
$
|
142,783
|
|
|
|
|
|
$
|
54,890
|
|
|
|
|
$
|
18,654
|
|
|
|
|
$
|
35,749
|
|
|
|
$
|
4,402
|
|
|
$
|
113,695
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NOI not included in same property
|
|
|
|
|
109
|
|
|
|
|
|
812
|
|
|
|
|
|
27,697
|
|
|
|
|
-
|
|
|
|
|
28,618
|
|
|
|
|
|
|
501
|
|
|
|
|
|
-
|
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
501
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Same property NOI (6)
|
|
|
|
$
|
55,142
|
|
|
|
|
$
|
19,578
|
|
|
|
|
$
|
34,913
|
|
|
|
$
|
4,532
|
|
|
|
$
|
114,165
|
|
|
|
|
|
$
|
54,389
|
|
|
|
|
$
|
18,654
|
|
|
|
|
$
|
35,749
|
|
|
|
$
|
4,402
|
|
|
$
|
113,194
|
|
Same property NOI growth
|
|
|
|
|
1.4
|
%
|
|
|
|
|
5.0
|
%
|
|
|
|
|
(2.3
|
%)
|
|
|
|
3.0
|
%
|
|
|
|
0.9
|
%
|
|
|
|
|
|
--
|
|
|
|
|
|
--
|
|
|
|
|
|
--
|
|
|
|
|
--
|
|
|
|
--
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Same Property NOI to Same Property Cash Basis
NOI:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Same property NOI
|
|
|
|
$
|
55,142
|
|
|
|
|
$
|
19,578
|
|
|
|
|
$
|
34,913
|
|
|
|
$
|
4,532
|
|
|
|
$
|
114,165
|
|
|
|
|
|
$
|
54,389
|
|
|
|
|
$
|
18,654
|
|
|
|
|
$
|
35,749
|
|
|
|
$
|
4,402
|
|
|
$
|
113,194
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non cash straight line rent adjustments
|
|
|
|
|
52
|
|
|
|
|
|
-
|
|
|
|
|
|
1,120
|
|
|
|
|
137
|
|
|
|
|
1,309
|
|
|
|
|
|
|
(37
|
)
|
|
|
|
|
-
|
|
|
|
|
|
1,480
|
|
|
|
|
137
|
|
|
|
1,580
|
|
Lease value amortization
|
|
|
|
|
-
|
|
|
|
|
|
-
|
|
|
|
|
|
(829
|
)
|
|
|
|
55
|
|
|
|
|
(774
|
)
|
|
|
|
|
|
-
|
|
|
|
|
|
-
|
|
|
|
|
|
(777
|
)
|
|
|
|
55
|
|
|
|
(722
|
)
|
Lease termination fees
|
|
|
|
|
-
|
|
|
|
|
|
-
|
|
|
|
|
|
105
|
|
|
|
|
-
|
|
|
|
|
105
|
|
|
|
|
|
|
-
|
|
|
|
|
|
-
|
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
-
|
|
Same property cash basis NOI (6)
|
|
|
|
$
|
55,090
|
|
|
|
|
$
|
19,578
|
|
|
|
|
$
|
34,517
|
|
|
|
$
|
4,340
|
|
|
|
$
|
113,525
|
|
|
|
|
|
$
|
54,426
|
|
|
|
|
$
|
18,654
|
|
|
|
|
$
|
35,046
|
|
|
|
$
|
4,210
|
|
|
$
|
112,336
|
|
Same property cash basis NOI growth
|
|
|
|
|
1.2
|
%
|
|
|
|
|
5.0
|
%
|
|
|
|
|
(1.5
|
%)
|
|
|
|
3.1
|
%
|
|
|
|
1.1
|
%
|
|
|
|
|
|
--
|
|
|
|
|
|
--
|
|
|
|
|
|
--
|
|
|
|
|
--
|
|
|
|
--
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) For a calculation, reconciliation and definition of NOI and Cash
Basis NOI, please see pages 8 and 9. Excludes properties classified
in discontinued operations.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2) Includes triple net senior living communities that provide short
term and long term residential care and dining services for
residents.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3) Includes managed senior living communities that provide short
term and long term residential care and dining services for
residents.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(4) Includes properties where medical related activities occur but
where residential overnight stays and dining services are not
provided.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(5) Includes the operating results of certain properties that offer
fitness, wellness and spa services to members.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(6) Consists of properties owned continuously since January 1, 2014.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SENIOR HOUSING PROPERTIES TRUST
CONDENSED CONSOLIDATED BALANCE SHEETS
(amounts in thousands)
(unaudited)
|
|
|
|
|
|
|
|
|
Balance Sheet:
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31, 2015
|
|
December 31, 2014
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
Real estate properties
|
|
|
|
|
$
|
6,717,946
|
|
|
$
|
6,238,611
|
|
Less accumulated depreciation
|
|
|
|
|
|
(1,023,843
|
)
|
|
|
(983,850
|
)
|
|
|
|
|
|
|
5,694,103
|
|
|
|
5,254,761
|
|
Cash and cash equivalents
|
|
|
|
|
|
77,794
|
|
|
|
27,594
|
|
Restricted cash
|
|
|
|
|
|
7,685
|
|
|
|
10,544
|
|
Deferred financing fees, net
|
|
|
|
|
|
29,649
|
|
|
|
30,549
|
|
Acquired real estate leases and other intangible assets, net
|
|
|
|
|
|
543,776
|
|
|
|
472,788
|
|
Other assets
|
|
|
|
|
|
184,088
|
|
|
|
172,033
|
|
Total assets
|
|
|
|
|
$
|
6,537,095
|
|
|
$
|
5,968,269
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
Unsecured revolving credit facility
|
|
|
|
|
$
|
—
|
|
|
$
|
80,000
|
|
Unsecured term loan
|
|
|
|
|
|
350,000
|
|
|
|
350,000
|
|
Senior unsecured notes, net of discount
|
|
|
|
|
|
1,743,983
|
|
|
|
1,743,628
|
|
Secured debt and capital leases
|
|
|
|
|
|
625,131
|
|
|
|
627,076
|
|
Accrued interest
|
|
|
|
|
|
31,984
|
|
|
|
20,046
|
|
Assumed real estate lease obligations, net
|
|
|
|
|
|
123,435
|
|
|
|
122,826
|
|
Other liabilities
|
|
|
|
|
|
87,769
|
|
|
|
72,286
|
|
Total liabilities
|
|
|
|
|
|
2,962,302
|
|
|
|
3,015,862
|
|
|
|
|
|
|
|
|
|
|
|
Total shareholders' equity
|
|
|
|
|
|
3,574,793
|
|
|
|
2,952,407
|
|
Total liabilities and shareholders' equity
|
|
|
|
|
$
|
6,537,095
|
|
|
$
|
5,968,269
|
|
|
|
|
|
|
|
|
|
|
|
|
|
A Maryland Real Estate Investment Trust with transferable shares of
beneficial interest listed on the New York Stock Exchange.
No shareholder, Trustee or officer is personally liable for any act
or obligation of the Trust.
Senior Housing Properties Trust
Kimberly Brown, 617-796-8237
Director,
Investor Relations
www.snhreit.com
Source: Senior Housing Properties Trust
News Provided by Acquire Media